Contract, Contract-to-Hire and Direct Hire: What’s Best for You?

Contract, Contract-to-Hire and Direct Hire: What's Best for You?
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The US Bureau of Labor Statistics reported an increase in job openings. Working is an inevitable part of human society. The views on labor had changed from when they first conceptualized the idea. Human labor catalyzes economic, social, political, and environmental changes. But these changes also lead to modifications in the views and practices of providing labor.

There are different work arrangements, each with its advantages and disadvantages. Choosing one requires you to consider your objectives, beliefs, and non-negotiables. Your work and its structures will influence how you plan your residence, future goals, family or personal time, and even health-related practices.

What work arrangements are usual, and how do you choose from them? The usual ones are contract, contract-to-hire, and direct hire. Many companies use one or more of these arrangements depending on their needs. This is both for the profitability and sustainability of the business.



This is one type of temporary employment. Alternative names for this type include independent contractors, freelance employees, work-for-hire, contracted, and contract workers. They work for a company as needed for projects that need their skills and expertise. The worker is free to stay on the job as long as they like or until they locate a better opportunity.

The gig economy has increased the number of contract workers in the US for their convenience and the liberties in hiring them. Being a contract employee can allow you to work remotely and with different companies. It is also a great way to build your work portfolio and compensation expectations from the clients and projects you can complete.

Perks of a Contract Employee Include:

  • Option to work remotely
  • Flexibility in work hours
  • Access to Voluntary Benefits from Employer
  • More control over Projects and Deadlines
  • The privilege of Experiencing the Work Dynamics of Different Companies

Drawbacks of a Contract Employee

  • Possibility of Long Commutes and Different Work Locations
  • Short Notice on Changes in Deliverables
  • No Access to Usual Employment Benefits
  • Fluctuating Income Stream
  • Separate Holidays and Leaves

Before starting your career as a contractor, you should also consider your credit score and resilience. Knowing you have full-time work increases the likelihood that banks will grant you credit cards. Consider considering working as a contract employee if you like having a set schedule for when you work and get paid. Those who need a flexible schedule, like being an adult care provider for a loved one, should consider contract employment. People with disabilities can also look into this, provided this could help manage their well-being better.



Fresh graduates with no work experience and those still testing the waters in their company should consider contract-to-hire work arrangements. Contract-to-hire, also called temporary-to-perm, is a full-time work arrangement, usually for six months. In this arrangement, you are a probationary employee who must undergo evaluation after six months. This can be mutually beneficial, given how competitive the job market is now. It is usual for companies to receive tens or even hundreds of applications for a single vacancy.

Contract-to-hire is a way for businesses to provide employment and verify if a candidate is genuinely suitable to become a core worker. This work arrangement can also help you understand the role and tasks. You can also experience a more sustained way company environment and dynamics. Full-time work arrangements like this include W-2 benefits.

Perks of a Contract-to-hire Employee Include having the following:

  • A better work experience duration for a CV/resume.
  • A set work schedule and company.
  • Having your employer file the W-2 form on your behalf.
  • A sense of stability in one employer.
  • The security of a stable income and employment benefits for six months.

Drawbacks of a Contract Employee include having the following:

  • Pressure to perform to reach KPIs and be regularized.
  • Uncertainty until the sixth-month review.
  • Probability of not experiencing or finishing projects with the employer.
  • No access to usual employment benefits.
  • Uncertainty of income after six months.
  • No security of being a permanent employee.

Being a temp-to-perm or contract-to-hire employee can be something you want to consider if you still need to set a set of professional plans but want a stable income stream. There is no guarantee that your employer will offer you a permanent positive, so you could use this time to prove your abilities and talent while looking for options elsewhere.



If you are someone who thrives on stability, routine, and certainty, then opting for a direct hire position is something you can consider. Direct hires, also called the core workers of a company, are individuals with expertise and qualifications in their profession. These qualifications and expertise allow them to be awarded permanent employment.

You do not need to undergo the usual probationary or evaluation period if you are a direct hire. There is an agreed-upon assumption that you can meet your role’s KPIs. Passive candidates with a good background and expertise in their fields are considered for direct or permanent hiring opportunities.

Perks of a Contract-to-hire Employee Include having the following:

  • A Set Work Schedule and Office/Work Station
  • Having your employer file the W-2 form on your behalf
  • Determined metrics for KPIs
  • The security of income and employment benefits
  • Less pressure to overperform and meet KPIs
  • Access/Privilege of Tenure and Professional Development Opportunities

Drawbacks of a Contract Employee include having the following:

  • Limited Leave Credits based on employer
  • Less freedom to explore other roles or departments
  • Difficulty negotiating salary
  • To report to the office and managers
  • Experience in routinary/redundant tasks

Retirement after being a permanent or tenured employee is better because of the employee benefits you can enjoy. Passive candidates with experience can have the privilege of becoming direct hires. Consider this option if you have a healthy household and a support system in raising your family.



Employers use a mix of contingent and core workers to achieve their goals. A fresh graduate or someone new to the world of labor but afraid of figuring out taxes can find contract-to-hire and direct-hire positions more convenient because it helps them focus more on work. If you enjoy working at your own pace and on your time, you may find contract work more exciting and rewarding. Your professional journey is always for you to decide.

Still uncertain? Ask people you know about their work journeys. You can find a mentor like a previous teacher or someone whose professional career inspires you and learn from their experiences. Learning about laws that protect you as part of the labor force should take precedence. There are many ways to work as it is with living.

Getting the help, you need can also come from a staffing firm. Staffing firms often have a long history of putting people in many career opportunities. They have professional human resource staff that can share the experiences of their new hires and the professional development they have to complete. A good staffing firm will help you weigh options based on your skills, potential, and preferences. Even if you have not learned what you want, a staffing firm can be a great place to start these discussions.



Choosing your professional career path can take time, and as the 14th largest IT staffing firm in the twin cities, we have the needed experience to help you pave that path for yourself. We can provide you with information, insights, and a hands-on recruiting staff to assist you in choosing the best professional path for you and your career. Being in the IT field and selecting the most suitable work arrangement can take time and effort. We can and are here to help! Contact us, and we can help you with your contract and any decisions that affect your career.

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